This Statement of Administration Policy provides the Administration's views
on the Energy and Water Development Appropriations Bill, FY 1999, as
reported by the House Appropriations Committee. Your consideration of the
Administration's views would be appreciated.

The Administration appreciates the challenges faced by the Committee in
funding a wide array of needs within tight budgetary constraints. However,
we are concerned that the $723 million increase provided by the Committee
for Army Corps of Engineers projects has come at the expense of other
priority programs.

Army Corps of Engineers

We urge the House to redirect some of the unrequested funding added by the
Committee for Army Corps of Engineers construction activities to fully fund
priority Corps activities at their requested levels, such as the Columbia
and Snake River salmon recovery efforts and Everglades restoration, and to
ameliorate harsh cuts in other priority programs funded by the bill.

Renewable Energy

The Committee mark eliminates the Administration's requested increase for
the solar and renewable energy program, effectively freezing it at its
current level and eliminating funding for many valuable cost-shared
projects with industry. The Committee has also cut requested new funding
for fundamental research into carbon sequestration and climate-change
dynamics in half, a reduction of $13.5 million from the President's
request. These funding levels result in a reduction of about one-third --
over $100 million -- in the President's total requested increase for
development of clean, non-greenhouse gas power sources. These changes
would seriously undercut the Department of Energy's (DOE's) ability to move
into the next phases of some of the most promising research now underway,
eliminate accelerated introduction of clean power sources, and restrict our
ability to lower greenhouse gas emissions levels. The Administration
strongly opposes these reductions. These programs provide numerous
benefits including greenhouse gas reduction, increased industrial
competitiveness, increased job opportunities, reduced energy costs for
consumers, increased energy independence, and improved air quality. We
will work with the Congress to restore funding in this critical area.

Department of Energy Defense Activities

The Administration strongly objects to the Committee's $358 million
reduction to the request for nuclear weapons activities. The Committee
states that $305 million of that reduction is to come from the use of
prior-year balances. Such large balances are not available. This cut
would force real reductions in critical programs needed to ensure the
safety, security, and reliability of America's nuclear deterrent.

The Committee has cut $15 million from the request for the Worker and
Community Transition Program and has added $16 million for the unrequested
acceleration of decommissioning activities at old facilities used for Naval
Reactors Development. The Naval facilities are in safe shutdown conditions
and are not a threat to the environment. The Administration objects to the
shifting of funds needed to assist displaced workers to accelerate
low-priority activities.

Science and Fusion

The Administration appreciates the Committee's efforts to fund fully the
majority of the Science accounts.

However, the Committee proposes to eliminate all funds for the Next
Generation Internet (NGI) program at the Department of Energy. The NGI
initiative, announced by the President last fall, provides the R&D
necessary to revolutionize high-speed networking capabilities in the United
States. Some DOE laboratories will be among the facilities to benefit from
the 1,000-times faster network to be established by the NGI. Further, the
multi-agency NGI effort will suffer without the participation of the
Department's leading networking researchers and advanced user communities.

The Administration strongly objects to the $57 million reduction in the
request (down to a level of $100 million) for construction of the
Spallation Neutron Source (SNS) in FY 1999. The Administration is
committed to providing the resources required to complete the SNS at cost
and on schedule.

Finally, the Administration objects to the elimination of funding to
participate in the extension of the international planning process that
led to the international design effort for the International Thermonuclear
Experimental Reactor (ITER). This action would have a serious negative
impact on U.S. participation in future international fusion efforts.
Moreover, since the United States hosts the international design center in
San Diego, California, the Administration is concerned that a U.S.
withdrawal from the ITER-planning process would undermine the credibility
of the United States in future negotiations on international science
projects.

Environmental Management

The Administration objects to the $230 million reduction in the Defense
Environmental Management Privatization account. These funds are needed to
meet required milestones and complete nuclear waste cleanup of DOE
facilities. The Administration also opposes the $47 million reduction in
the Uranium Enrichment Decontamination and Decommissioning Fund. This
reduction would significantly delay environmental restoration efforts at
the plants covered by the fund, thereby increasing the cost for these
activities.

Nuclear Waste Disposal

The Committee's reduction of $30 million to the request for the civilian
radioactive waste program, and its directive to reduce support services by
ten percent, would significantly reduce the quality of data and analysis
for the Draft Environmental Impact Statement (DEIS) at Yucca Mountain. A
quality DEIS, which is an FY 1999 milestone, is a necessary prerequisite to
an FY 2001 Site Recommendation.

Bureau of Reclamation

We urge the Committee to fund fully the request for the California
Bay-Delta program. Less than full funding could delay Federal and State
efforts to restore this important ecosystem. We also urge the Committee to
restore the reductions totaling over $60 million in other Bureau of
Reclamation programs, in particular $16 million for the environmentally
important, user-financed Central Valley Project Restoration Fund and $11
million for vital dam safety work.

Other Issues

The Administration strongly objects to the Committee's providing
only $5 million of $34 million requested for the Nuclear Energy Research
Initiative and the Nuclear Energy Plant Optimization program and urges
that the full amount of the request be restored.

As drafted, the Committee's transfer proposal could leave a gap in
safety and health oversight at the Lawrence Berkeley facility. Specific
statutory authorization may be needed to provide either OSHA or the
State of California with appropriate jurisdiction for regulating
occupational safety and health. In consultation with congressional
authorizing committees, the Administration is developing a plan for
oversight of both occupational and nuclear safety within the DOE
complex.

The Administration objects to the Committee's elimination of all
appropriations for the Tennessee Valley Authority (TVA). TVA's
non-power programs should receive Federal appropriations just as similar
programs in other regions of the Nation are financed by appropriations
to other Federal agencies.

Finally, the Administration objects to section 306 of the Committee
bill which appears to impact adversely efforts at national laboratories
to stimulate cross-cutting developments in the private sector.